Home Sellers Guide
There are a number of
steps to selling any house. Experience
has taught us that every home sale is
unique. Yet every sale — from putting
the house on the market to settlement
day — shares a common process.
Long & Foster’s Home Sellers Guide is
designed to help you understand the
selling process beforehand. This inside
know-how will help you make smart
decisions every step of the way — and
set aside any worries you may have from
the beginning.
Of course, this short guide cannot
answer all your questions. For specific
answers to your specific situation,
contact
Ron DeLuca.
We will be happy to
share our expertise. After all, we want
you
to get the best selling price in the
shortest time. Every advantage is yours
when you do business with Long & Foster,
The Real Edge
in Real Estate®.
Putting Your
House On The Market
The first step toward putting your house
up for sale is to meet
with a real
estate Sales Associate at your home.
This is what we
call the “listing
appointment”.
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Clean Up, Fix
Up, Or Toss Out
Today, the home that stands out among
similarly-priced houses
is the home that
sells. Why? Because it makes a good
first impression that lasts right to the
settlement table.
You may not be able to improve the
market value of your
house (finish
basement, remodel kitchen, etc.), but
you can
improve its marketability. And
usually this can be done with more elbow
grease than hard cash. The key is to put
yourself in the buyer’s shoes. In fact,
if you drop by some open houses (you may
soon be a buyer yourself), you’ll pick
up some pointers.
Then practice making
your house as appealing and uncluttered
as the home you wish to buy.
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Leave The
Selling To Us
While the home seller is actively
getting the house ready to show,
the
listing broker is actively spreading the
word that the property
is available.
Generally speaking, the listing is
promoted to two groups: the real estate
community and the buying public.
Many home sellers are surprised to learn
that approximately
56% of all buyers
come from referrals between brokers and
their vast network of contacts.
Approximately 17% of buyers come from
inquiries stimulated by “for sale” signs
in yards. The remaining 27% of buyers
come from a combination of the real
estate company’s reputation and image,
open houses, and advertising or other
promotional efforts. Obviously, the most
productive source of buyers is working
closely with other brokers, and this is
where your listing broker begins.
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Signing On The
Dotted Line
A buyer makes an offer by submitting a
written and signed offer
to purchase,
which will become the sales contract
when ratified by everyone’s signature.
Once the seller and buyer sign the
paper,
they are bound by the contract
conditions.
The “presentation of a contract” begins
when the selling broker registers the
offer with the broker’s own office and
notifies the listing broker of the
offer. The listing broker then arranges
a presentation appointment with the home
seller, and with the selling broker in
some areas. (The buyer doesn’t attend
the presentation.)
Either the selling broker or the listing
broker presentsthe terms of
the offer,
depending on local customs. The listing
broker acts as
the home seller’s
advisor. Part of the presentation is
determining
that the buyer is qualified
financially to make the purchase.
(Should either the seller or buyer be
out of town, the contract is presented
via telephone and confirmed later by
FAX.)
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Processing The
Case, Etc.
The listing or selling broker (depending
on local custom) oversees
a contract
through to closing and helps to place
the financing, process the case, arrange
various inspections and review
financing
and “points”.
At this stage, all contingencies will be
satisfied and removed. The buyer will
select a settlement and/or a title
company, and the listing or selling
broker will notify those firms and
provide the vital information.
A number of professionals come into the
home selling process during this period,
including a home inspector (if requested
by the buyer), well and septic
inspectors, termite inspector, appraiser
and attorneys. A mortgage approval can
be made at application in many cases
subject to verification of the
information provided. However, on the
chance that the financing falls through,
the seller should keep the property in showable condition.
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Buyer’s Final
Inspection
The purpose of the walk-through
inspection prior to settlement is
to
determine if conditions in the contract
are satisfied. The time for the buyer to
inspect and note defects for correction
by the seller
is during the contract
negotiation and prior to signing the
sales agreement. Repair or replacement
items should be noted in the contract.
Most resale homes are sold in “as is”
condition,
however, mechanical,
electrical, and plumbing items should be
in working condition.
It is up to the buyer to perform the
inspection, not the seller
who may or
may not be present. The buyer should be
accompanied by the selling broker and/or
the listing broker. The home seller
should be sure utilities are on so that
equipment can be operated.
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Signing Papers
And Transferring Keys
The big day is here! Tonight you can pop
open the champagne,
but today there will
be a lot of paper signing and a poignant
passing of the keys (don’t forget the
garage keys, and the electric garage
opener, too).
At the settlement will be an attorney or
title company
representative, the buyer,
listing and selling brokers, and all
owners. The home seller should bring all
warranties on equipment (or leave them
in the house) and any instructions on
equipment maintenance
or operation.
The attorney will have searched the
title, and obtained old and
new lender
instructions. First, all unresolved
walk-through deficiencies are resolved.
With the buyer, the attorney explains
the deed of trust, deed of trust note,
and settlement sheets. The buyer signs
all three, and pays the balance of the
down payment and buyer’s closing costs.
With the seller, the attorney explains
the deed and settlement sheets and gets
the home seller’s signature on them. The
seller pays appropriate closing costs.
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Different
Mortgage Strategies
When it comes to paying for a home,
buyers today have an almost unlimited
number of financing options.
Here’s a run-down on the main types of
financing. Interest rates
are intended
for illustration only. Ask your Long &
Foster Sales Associate or loan officer
from Prosperity Mortgage Company,
a Long
& Foster affiliated company, for current
market rates.
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Words To The
Wise
Below is a handy guide of terms that
sellers need to know.
Agent
A person acting on behalf of another,
called the principal.
Agreement of Sale
Known by various names, such as
“contract of purchase”, “purchase
agreement”, “sales agreement”, or
“binder”, according
to location or
jurisdiction. A contract in which a
seller agrees to
sell and a buyer agrees
to buy, under certain specific terms and
conditions spelled out in writing and
signed by both parties.
Annual Percentage Rate (APR)
Includes quoted interest rate on the
loan plus all additional
service and
finance charges associated with the
loan. Includes
all costs of financing;
those paid at the time of closing and
those
paid over the term of the loan.
The APR is usually slightly higher than
the note rate.
Appraisal
An expert judgment or estimate of the
quality or value of real estate as of a
given date.
Assessed Value
The valuation placed upon property by a
public tax assessor as
the basis for
taxes.
Bill of Sale
An instrument which transfers title to
personal property (chattels);
a “Deed”
transfers real property.
Certificate of Title
A document signed by a title examiner or
attorney, stating that the seller has a
good marketable and insurable title.
Closing Statement (Settlement)
The computation of financial adjustments
between buyer and
seller as of the day
of closing a sale to determine the net
amount
of money which buyer must pay to
seller to complete purchase
of the real
estate and seller’s net proceeds. Also,
“settlement sheets”, “HUD-1”.
Commission
Payment to a real estate broker for
services performed.
Convey
To deed or transfer title of property
from one person to another.
Deed
A formal written instrument by which
title to real property is transferred
from one owner to another. Also,
“conveyance”.
Deed of Trust
Like a mortgage, a security instrument
whereby real property is given as
security for a debt. However, in a deed
of trust there are three parties to the
instrument: the borrower, the trustee,
and the lender (or beneficiary).
Earnest Money
The money given to the seller by the
potential buyer (usually held
in escrow)
upon the signing of the agreement of
sale to show that buyer is serious about
buying the house. Also, “deposit”.
Equity
The interest or value which owner has in
real estate over and above the debts
against it. (Sales Price – Mortgage
Balance = Equity.)
Escrow
Funds, property, or other things of
value left in trust to a third party.
The escrow may be released upon the
fulfillment of certain conditions or by
agreement of the parties.
Fixture
What was formerly personal property
which is now permanently attached to
real property and goes with the property
when it is sold.
Hazard Insurance
Protects against damages caused to
property by fire, windstorms, and other
common hazards.
Listing Contract
Between a homeowner (as principal) and a
licensed real estate broker (as agent)
by which the broker is employed to
market the real estate within a given
time for which service the owner agrees
to pay a commission. Also, “listing
agreement”.
Market Value
The highest price which a buyer, ready,
willing and able but not compelled to
buy, would pay, and the lowest price a
seller, ready, willing and able but not
compelled to sell, would accept. Basis
for “listing price”, or “asking price”.
Market Price
The actual amount for which a piece of
property is sold. Also,
“sales price”,
“purchase price”.
Mortgage
A lien or claim against real property
given by the buyer to the
lender as
security for money borrowed.
Mortgage Note
A written agreement to repay a loan. The
agreement is secured
by a mortgage,
serves as proof of an indebtedness, and
states the manner in which it shall be
paid. Also, “deed of trust note”.
P.l.T.I.
Principal, interest, taxes, and
insurance. Most residential
mortgage
payments include the above and are
therefore referred
to as P.I.T.I. Also,
“carrying charges”.
Points
Sometimes called “discount points”, a
point is one percent of the amount of
the mortgage loan.
Prepayment Penalty
Penalty for the payment of a mortgage
note or deed of trust note before it
actually becomes due.
Principal
This word has several meanings:
(A) to denote the most important;
(B) a capital sum lent on interest;
(C) one who appoints an agent to act on
their behalf;
(D) either party to a contract.
Property Management
The operation of real property,
including the leasing of space,
collection of rents, selection of
tenants, and the repair and renovation
of the buildings and grounds.
Prorate
To allocate between seller and buyer
their proportionate share
of an
obligation paid or due. For example, a
prorate of real
property taxes, fire
insurance, or condominium fee.
Sales Associate
A person with a real estate license and
associated with a specific real estate
broker.
Survey
A map or plat made by a licensed
surveyor showing the results
of
measuring the land with its elevations,
improvements, boundaries, and its
relationship to surrounding tracts of
land. A survey is often required by the
lender to assure a building is actually
sited on the land according to its legal
description.
Title
As generally used, a document that
indicates rights of ownership
and
possession of a particular property.
Title Abstract
A summary of the public records relating
to the title to a particular piece of
land. An attorney or title company
reviews an abstract or title to
determine whether there are any title
defects.
Title Insurance
Protects lenders and homeowners against
loss of their interest in property due
to legal defects in title.
Title Search or Examination
A check of the title records, generally
at the local courthouse,
to make sure
the buyer is purchasing a house from the
legal owner and there are no liens,
overdue special assessments, or other
claims.
Transfer Tax
State tax, local tax (where applicable),
and tax stamps (in some areas) required
by law when title passes from one owner
to another.
Ask your Long & Foster
Sales Associate for a copy of the
“Understanding the Role of the Real
Estate Agent” (LF1192, for use in the
state of Maryland only);”A REALTORS®
Role” (LF1193, for use in the state of
Virginia only); or “The Agency
Disclosure Brochure” (LF1195, for use in
the District of Columbia only).
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